BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 221|
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THIRD READING
Bill No: AB 221
Author: Carter (D)
Amended: As introduced
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 8-1, 6/28/11
AYES: DeSaulnier, Gaines, Huff, Kehoe, Lowenthal, Pavley,
Rubio, Simitian
NOES: Harman
ASSEMBLY FLOOR : 79-0, 5/31/11 - See last page for vote
SUBJECT : Housing bond allocations for emergency and
supportive
housing
SOURCE : Author
DIGEST : This bill allows the Department of Housing and
Community Development to expend bond funds earmarked for
the Emergency Housing Assistance Program (EHAP) either for
EHAP or for the Supportive Housing Program.
ANALYSIS : As approved by the voters, the Housing and
Emergency Shelter Trust Fund Act of 2002, Proposition 46,
authorized the issuance of $2.1 billion in general
obligation bonds to finance various affordable housing
programs, most of which Department of Housing and Community
Development (HCD) administers. Among other things,
Proposition 46 included funds for the following programs:
CONTINUED
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$910 million for the Multifamily Housing Program (MHP),
which funds the new construction, rehabilitation, and
preservation of permanent and transitional rental homes
for lower income households, through loans to local
governments and developers.
$195 for the Supportive Housing Program, a subprogram of
MHP which funds rental homes with support services for
persons who have a disability and are homeless or at
imminent risk of becoming homeless.
$195 for EHAP, which provides grants for the
rehabilitation, renovation, expansion, and site
acquisition of emergency shelters and transitional homes
for homeless individuals.
In November 2006, California voters approved Proposition
1C, the $2.85 billion Housing and Emergency Shelter Trust
Fund Act of 2006. Among other things, Proposition 1C
included funds for the following programs:
$345 million for MHP.
$195 million for the Supportive Housing Program.
$50 million for EHAP.
This bill allows HCD to expend the funds earmarked for EHAP
in both Propositions 46 and 1C either for EHAP or for the
Supportive Housing Program.
Comments
Program challenges and status . Since the passage of
Proposition 46 in 2002, HCD has received $320 million in
applications and made $211 million in awards under EHAP.
These awards have now almost completely exhausted the
relatively large allocation of Proposition 46 funds for
EHAP and about half of the much smaller Proposition 1C
allocation. In May 2010, HCD issued a Notice of Funding
Availability (NOFA) soliciting applications to award up to
$40 million in EHAP funding. HCD made only $20 million in
awards under this NOFA. HCD expects to offer the entire
remaining $20 million in Proposition 46 and 1C EHAP funds
in August of this year.
In spite of the large amount of funds awarded to date, the
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EHAP program has had its challenges. Because these EHAP
funds come from general obligation bonds, HCD can only fund
capital improvements, not operating costs. Shelter
operators have always had difficulty arranging operating
grants, never more so than now as public and philanthropic
entities cut back support. As a result, many operators are
reluctant to build or expand. In addition, HCD's $1
million limit on EHAP awards may not work for larger
projects that cost more than $1 million but have few other
sources of revenue. While the needs of the homeless have
not gone away, these factors have surely dampened demand
for EHAP funds. In spite of these challenges, it appears
likely that HCD will have awarded all, or close to all, of
the funding available to EHAP by the end of this year, in
which case this bill may become moot.
Previous legislation
Last year, the author introduced an identical bill, AB
2536. Governor Schwarzenegger vetoed that bill, stating:
This bill would change the use of housing bonds
contrary to the intent of the voters in approving
Proposition 1C. These funds were intended to help some
of the most vulnerable Californians by funding the
construction of emergency shelters that also provide
supportive service. It is not consistent with the
intent of the voters to redirect these funds to provide
services to families in permanent housing.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14
Fund
Bond fund redirection
Significant cost pressures to the extent
Bond*
HCD uses EHAP funds for supportive
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Housing under MHP
*Potential shift from the Emergency Housing Assistance Fund
to the Housing Rehabilitation Loan Fund
SUPPORT : (Verified 9/8/11)
California Communities United Institute
Housing California
National Alliance on Mental Health
Western Center on Law and Poverty
ARGUMENTS IN SUPPORT : According to the author's office,
a substantial amount of EHAP funding remains available
while the Supportive Housing Program is oversubscribed and
has a limited amount of funding remaining to finance the
many projects ready to go. Moreover, in recent years the
focus of efforts to combat homelessness have shifted from
simply providing shelter to the more comprehensive "housing
first" model, in which homeless persons are placed in
housing first and they encouraged to take advantage
supportive services, such as drug and alcohol treatment,
mental health counseling, and workforce training. These
housing first projects are eligible for funding under the
Supportive Housing Program but not under EHAP. Therefore,
it makes sense to make the EHAP funds available for all
approaches that serve homeless individuals and families.
ASSEMBLY FLOOR :
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Norby, Olsen, Pan, Perea, V. Manuel P�rez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
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John A. P�rez
NO VOTE RECORDED: Gorell
JJA:do 9/8/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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